You may recall a few weeks back that stories in the UK noted that (non-elected) UK Business Secretary Peter Mandelson had a sudden conversion to caring about copyright issues after dining with David Geffen while on vacation. And, despite months of careful study that went into the Digital Britain report, where it was declared that a policy of kicking people off the internet was not on the table, Mandelson suddenly demanded that his department change that plan. And… just like that, the “three strikes” rules are back on the table.

After being widely ridiculed for his suddenly interest in this issue, it looks like Mandelson has decided to defend himself with a guest column in the Times Online, where he runs through the arguments in favor of his position — all of which read like someone who’s been fed lines by some lobbyists — and then claims that he’s open to hearing other ideas and that he understands why people are upset. Of course, if that’s the case, why did he propose such a preposterous idea right after the Digital Britain report had rejected it? Either way, let’s go through some of his thinking:

First, taking something for nothing, without permission, and with no compensation for the person who created and owns it, is wrong. Simple as that.

Right. Well, other than fair use. Or, what if it’s for promotional purposes? And, how do you define “owns it” in that sentence? After all, if I bought a CD, don’t I own it? Or maybe not. Wait… this isn’t so “simple” after all, is it, Lord Mandleson? Perhaps that’s why so many people have spent so many years digging through the problems of copyright law, and recognize how problematic it is when you try to compare it to real property, such as by claiming someone “owns it” even after they’ve “sold it.” So, no, while it may look simple at first, it’s not that simple. And that’s rather important.

I was shocked to hear that as much as half of all internet traffic in the UK is for the carriage of unlawful content.

As you should be, because those numbers are bogus and supplied by the industry. But, why let that stop you.

If technical solutions can discourage piracy, then as a Government we are obliged to consider them.

So here’s a question: which is more important: discouraging “piracy,” or having a thriving and robust creative industry? Because that’s pretty important. I would assume that the latter is a lot more important, and a lot of what you seem to be saying suggests that if the industry stamped out unauthorized file sharing, people would magically go back to spending their money on that same industry. Yet, there’s no proof to support this at all. The industry has been all about the stick, and never seems to put out a carrot. Go ahead and get your three strikes plan, but don’t be surprised when the creative industries still fail, because they’ve pissed off so many people who choose not to do business with them.

Second, our creative businesses drive much of our economy.

Indeed. And to my last point, then, the goal should be on doing things to encourage “creative businesses” to update their business models, rather than relying on false models of artificial scarcity. You do realize that a UK-based music organization (PRS) recently released a report noting that the music industry in the UK is actually growing? Right? These are the sort of facts the Secretary of Business knows, right? And if the industry is growing, despite complaining about file sharing, isn’t it possible that the real issue is just focusing on business model improvement, rather than the hand of gov’t stepping in and slapping people around?

They provide not only tax revenues and jobs but also ensure that Britain punches above its weight on the global cultural stage. We are a creative people and we do these things well.

Indeed. Good to know they’re doing well by adapting new business models. Why interfere with that process?

These businesses will get no favours from government

Well… you mean other than a massive subsidy in the form of a gov’t granted monopoly that lasts longer than all of our lifetimes? That, at least, must count as a little favor, doesn’t it?

but we should create a regulatory environment where they can operate without having to deal with illegal competition.

“Illegal” competition is a funny thing. See, since you’re the gov’t and you get to define what is and what is not illegal, it leaves you open to a bit of regulatory capture (the sort that gets tongues wagging about fancy dinners with industry execs in far-away vacation retreats) whereby anything that a legacy industry doesn’t like and doesn’t want to deal with is suddenly called “illegal.”

And yet, despite this “illegal” competition, we see many creative ventures and creative artists learning to embrace this “illegal competition” in the form of file sharing to create much more effective business models. We see artists and new up-and-coming operations that encourage people to file share, and put in place other reasons to buy, such that file sharing isn’t “illegal competition” at all. It’s free promotion from your biggest fans.

Crucially, if these changes can give the creative businesses and their partners the space to develop new business models that support more new artists, acts and films, then surely we are duty bound to consider them.

I recognize that you are the Business Secretary, but in the history of business, it is not the government “giving room” to legacy industries that leads to them developing new business models. It is the force of true competition, that requires them to be innovative. Welcome to the world of “creative destruction.” Holding off the creative destruction does not encourage the new business models. The whole reason the industry is wining and dining you is because they want to hang onto whatever scraps of their dying business model for as long as they can.

Let me emphasise that nothing has been predetermined. And I understand why internet service providers (ISPs), consumer groups and digital rights activists are disappointed that we have decided to consider a range of tougher and faster measures. But let me try, if I can, to reassure them.

Then why were there so many reports that you suddenly (after showing no interest in the subject previously) returned from vacation hellbent on adding “three strikes” to the plan?

I made clear to the content industry that we would consider legislation that includes temporary account suspension only if it was seen as the sanction of last resort. It would only follow a well-established series of warnings and clear evidence that they were taking action to defend their own rights.

Ah, but you seem to have ignored the other part of the equation: users’ rights. The EU has declared that cutting people off from the internet is a civil rights violation. Doing so without true due process is a huge violation of their rights. Why would you support that? If the “clear evidence” is only that they were defending their rights, rather than that someone had violated the law, isn’t that a pretty massive due process problem?

I want to know more from digital rights groups and consumers about other steps that should be taken to protect people who may feel that they are at risk of being accused without good cause. This could perhaps be because of legitimate file sharing, or because of others hijacking their connection. Having a fair, fast and effective appeals process will obviously be essential.

Wait. Shouldn’t the bigger concern be why they have to go through such a process in the first place? Especially when the industry is growing and adapting new business models (see above) and have no need for the gov’t to put in place such draconian measures? Why are you already jumping to a situation where some people need to be “protected” rather than removing the threat of erroneous shut-offs entirely?

Yes, the lawsuit strategy failed. But three strikes is a continuation of those same failed policies. The industry has had those ten years to develop and support innovative new business models — but the major players have failed, time and time again. They sued Napster. They sued Kazaa. They sued The Pirate Bay. They sued Grooveshark. They sued MP3tunes. They sued iMeem. They sued MP3.com. They sued Launchcast. They sued Hi5. They sued VideoEgg. They sued Seeqpod. They sued Favtape. The list goes on and on and on and on.

They’ve had these ten years to develop new business models. And they failed. Instead, the new business models have been developed outside of the legacy industry — and they’re working. Let them be. Don’t give this tool to the legacy players, who failed to innovate. Let them go out of business, and let a new, and much more creative “creative business” industry take over.

You’re being played for as a fool by a legacy industry that wants to squeeze every bit of money it can from a dying business model. Putting up three strikes isn’t giving them space to develop a new business model. It gives them time to squeeze more out of a corpse.

Ultimately the answer to combating digital piracy lies in the hands of those who own content and those who control access to the internet.

Ah, see there’s you’re problem. You keep going back and forth between “saving the creative industries” and “combating digital piracy” as if they were one and the same. They’re not. There are many successful creative businesses now embracing digital piracy to their advantage by being smart. You should talk to some of them. And, note the party you left out of the equation: the users. The folks who consume and interact and share and promote and buy. If you want to know what the answer is for a thriving creative industry, you should be talking to them — not the folks still trying to sell plastic discs.

Ask me what I think will finish off piracy as a real threat to our creators and creative businesses and the answer is obvious — it is the market.

Then why are you favoring one set of players and one business model? That’s not the market at work. It’s the opposite.

Mandelson’s entire argument seems to be built off of a very faulty premise: stop file sharing and the industry succeeds. That’s wrong on a variety of points. First, as much as you want to, you won’t stop file sharing. You’ll just drive people further underground, and that helps no one. Second, the creative industry is thriving today, even with file sharing, and many who are doing great are doing so by embracing it, and using it to their own advantage. Getting rid of file sharing is not the same thing as “succeeding” in the industry. Third, even if you did magically make file sharing disappear, that’s got nothing to do with actually giving people a reason to buy. Pissing people off by cutting them off the internet actually gives them fewer reasons to buy.

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